Wednesday, November 06, 2013

Why Post-Scarcity Economics is Scary

Follow along if you will on a mental exercise in post-scarcity economics.

"Post Scarcity" is basically a utopian ideal of economists. It means everything is free because things are no longer scarce. Matter of fact the entire study of economics would be unnecessary in a world where resources were unlimitedly plentiful and not scarce. But to really wrap your brain around the concept of "post scarcity" you have to understand what it really means.

If resources were unlimited, everything would be free. Cars would be free just as gumballs would be free. And because everything is free, then NOTHING would have value. There would be no prices. Just "stuff."

You can kind of imagine this if you've ever seen Star Trek where they have the replicator. As a child you might say, "Well I'd replicate a ton of diamonds and be rich!" But the problem is there is no "rich" or "poor" in a post-scarcity economy. The diamonds have no value because they can be replicated ad-infinitum, just like everything else. Again, NOTHING would have value, NOTHING would have a price. Matter of fact in a TRULY 100% post scarcity economy, you wouldn't even have money, because,

what would you buy? Everything is free.

Naturally, a 100% post-scarcity world is actually impossible. Even if we perfect 3 d printing, you need people to maintain the 3d printers, people to transport goods, electricity, not to mention maintain the infrastructure of society as well as some government services to manage the humans. But what is interesting about economics (and humanity) is that though a 100% pure post-scarcity economy is impossible, we are constantly, asymptotically approaching it. Just 100 years ago food was kind of a huge issue. Now it isn't. Just 250 year ago, electricity was a huge issue (non-existent). Now it isn't. And thus, though we will never have EVERYTHING be truly free, because of technological advances, we are constantly closing in on that post scarcity goal.

This then leads the human mind into an interesting world. If 3d printers actually deliver on all of their promises, it will be the first time in human history where your physical needs are met at zero or near zero cost. This then behooves the question:

"What will humans do or pursue in life?"

Realize you, me and everybody else works a fair percentage of our lives working up the money to pay for everything. But if "everything" (or most everything) were free, what would the economy be about then? What would humans work and live for?

The answer is other humans.

Specifically, sex and attention.

Imagine again there is no such thing as money. Material goods and physical possessions are limitlessly abundant. What would then have any kind of value in this society and economy? Well, with physical goods being completely free, the only thing would be non-physical goods or services, namely provided by humans. And because of our binary sexual nature, this would leave only two goods or services left to be traded.

Sex and attention.

Men would want sex from women and women would want attention from men.

Of course, this trade has always been going on, but has been confused or complicated with physical goods. Men needed to display their income earning potential to convince women that are good providers, so they would buy "expensive stuffs" like sports cars, Rolexes, etc. to peacock around. But, alas, in a post-scarcity world, this role would be rendered obsolete, relegating the man solely to his ability to provide attention to score some sex. Women would also face a much more simplified economy. Instead of having to work all those extra hours to buy a pravda purse and pay off her Masters Degree in English, she now just has to earn mens' attention by solely focusing on her physical beauty. And this is where it gets scary.

Though it's impossible to predict, as far as my SAEG (TM) tells me, a post scarcity world would be nothing more than a super, hyper-sexualized world where the last remaining economy is purely based on men's ability to be ripped and buff, and women's ability to make themselves as pretty as possible. In other words, imagine Miley Ray Cyrus and roided up guys at the gym, but a hundred times more vain, slutty, and self-obsessed. Millions of them, all trying to outdo each other in order to garner the most about of sex/attention they can.

In short what would happen is an arms race based on narcissism, looks, beauty, and the like that would drive both the supply and demand curves to the right for sex and attention.

Normally, economists would agree this is a good thing. When the supply and demand curves for anything shift right, you have increased production but (assuming proportional increases in supply and demand) no increase in price. But my fear is at what human cost.

Humans are not cars or widgets. And matter of fact, intellectual conversation and stimulation I believe is the most important thing humans can provide other humans, something physical items can't. But with everybody racing for the gym, getting the latest implants, and injecting themselves with the latest roids, it is unlikely such a vain society will stimulate intelligence, let alone intelligent conversation. And so my second prediction.

Should post-scarcity ever occur, it will fragment humans into two camps.

1. Those willing to expend the effort necessary to participate in the arms war of sex/attention
2. Those not willing to expend the effort and instead focus on intelligence and personality

The first group will likely breed and populate the future as their entire focus is on sex and attraction. The second group, though maybe not as much, will still copulate, but focus on less physical and more mental qualities and traits. Naturally, over time, these two groups will evolve with one group becoming "hotter" and the other group "uglier," but it makes me wonder if over time and because of the "hyper arms-sex-attention race" post scarcity would instill in the "hot group," that they would evolve into separate different species (and is here where my speculation runs out as I am not a great biologist, geneticist, let alone philosopher, and is perhaps where others might take over).

However, as I said before, this was a mental exercise. There are many variables that would make such a scenario unlikely, even impossible, and I would hope some of you would point those out (besides, it would only take one generation focusing on looks and not the engineering needed to keep the 3d replicators operational that would end the post-scarcity economy). But before economists cheer for a post-scarcity economy, they may want to think about what it would replace and what the consequences might be.

58 comments:

I think we'd see less divergence than you're assuming, here. It's not a matter of being the most attractive or not trying at all; a woman in the brainy/personality camp who expends just a modicum of effort on her appearance may well be a better catch than one who focuses on intellectual pursuits to the detriment of all else.

Men value beauty and intellect to varying degrees. Because tastes vary, we won't see complete polarization of reproductive strategies.

Interesting. This scenario is based on the premise that post scarcity does not include human replicas. By the time this future arrives both men and women will be made redundant for sexual reasons by technology.

It's my belief that a split will occur between those who maintain their health and those who don't.

You miss the obvious, Captain.....the pursuit of power.We see glimpses of it all aspects of civilization. Followers on social media, the religious devout and political ideologues. In a world without money, influence and power would become the new currency.Just a thought......

I've actually been trying to come up with a plot and story for a post-scarcity world, and the biggest problem I can think of is finding some form of impetus, or even agency. It's hard to maintain narrative tension or interest if you don't have stakes or goals, or a means by which your characters grow and change.

I realize this is just a hypothetical exercise, but i think there are some items of value you have failed to consider in your post-scarcity world. First, what about the time it takes to produce things? Even if you have replicators with infinite resources (unless you have infinite replicators), it still takes time to make stuff. And time that the replicators spend making stuff for me, is time that they are not making what you want. Would time using the replicators be the new medium of exchange?

My other thought is to wonder how the invention/discovery of new stuff would work in post-scarcity land...

Interesting post. I don't think replicators will bring on the post-scarcity world, though. (I think the energy costs will be too high to provide for everybody.) No, the post scarcity world will most likely be brought about via Virtual Reality--We've already found a way to create realistic enough 3-D worlds visually--the main hurtle now is finding a way to inject ourselves into these worlds and experience full sensory perception within them. Once that's done, all bets are off. You could create virtually anything (even a sexy avatar for yourself. No more having to hit the gym!)

The only people in this world who will have any value are the Creators--people who can engineer all of the stuff that the virtual world will contain. And once something has been made, it can be replicated endlessly. The only other people who'll make money are entertainers and those whose job it is to keep the Virtual World functioning. Want to see a sneak preview of this world? Go sign up for a Second Life account and visit the Second Life Marketplace. You'll see all sorts of virtual items for sale. (And you'll notice that the entire world itself is nothing more than a giant mall--apart from a few artsy installations and virtual sex shops.) It's an echo of the future that might be worth your looking into.

If you haven't read _Life at the Bottom_ by Theodore Dalrymple, I recommend it. He talks about his experiences with Britain's dolists who, as a class, already live in a post-scarcity society. Their food, housing, clothing, and medical needs are met by Britain's welfare system, and they're given money to indulge their desires for anything else.

What you describe is what Theodore Dalrymple describes of the welfare-dependent classes in the UK, and which you can see yourself in the US. When your entire social circle is made of people whose basic needs are met without working, sexual dimorphism for those willing to compete for sex and attention is at its strongest, and withdrawal from the competition comes with a demoralised collapse into shapeless slobbery.

But I think peak oil is the key driver of economies for our own lifetimes and food (real food) is already beginning to go up in price again.

The terrifying thing is that in that kind of future economy, too many of the Left will not be content when all the essentials can be had for extremely cheap. They'll still be fussing because somewhere someone out there is buying and selling entire planets while the "poor" are struggling with their paltry 5TB/day data limit on their 6-months-behind-cutting-edge smart phones.

Your scenario is plausible; indeed, it is partially realised today, and would be more closely realised if it weren't for leftists. Again, it was partially realised in Roman society in late Republican and more particularly early Imperial times. People in the upper class devoted themselves to the arts, to sex, and to the pleasures of the table. Power politics weren't very interesting because the Emperor looked after that, and it was dangerous to get involved. Every type of sex proliferated, in particular sex with boys, but everything went. And it was much too much effort to raise children. So the upper class declined. To be fair to them, certain of the Emperors such as Tiberius did murder a lot of them.

It lasted a long time, but eventually external forces brought about change. In the first instance the Germanic invaders ended the Western Roman empire, and then much later the rise of the Slavic region weakened the Eastern empire, which was finished off by the Turks in 1453. But it had a long run for its money.

Men need women for only two things: sex and reproduction. As soon as those two thing are achieved through automation (and/or a libido suppressing pill), all women will be sent into the gas chambers. And before you delete this comment because it violates some kind of nonviolence comment policy, let me just add that what I am describing, is what I predict WILL happen, not necessarily what I think SHOULD happen (though I do).

3D Printers are, and always will be, a very expensive way to produce product prototypes and bad art. Without altering a few laws of physics it's impossible for them to produce actual functional assemblies or flexible materials.

Please don't tell me about the guy who printed a machine gun receiver - that only proves my point.

Any "expert" who confidently predicts anything more than that is likely indulging in a little magical thinking.

This is a fascinating speculation, and props to you for that. But it's just a speculation.

Let me quote Freeman Dyson: I believe we understand very little about human nature, about psychology or about economics. I do not take seriously any of the people who claim to predict the future. I believe them even less when they claim to be accurate predictors.

If AI and robotics technology continue improving at an accelerating rate, then will will live essentially in a post-scarcity economy within the next 100 years since powerful AI + good robotics means anything can be made with little or no effort by humans.

You seem to forget that there are a whole host of services that people can provide - doctors, lawyers, hairdressers, Just because cars are essentially free, doesn't mean one won't be nominally 'yours', and that means it will need oil changes, washing, etc., some of which might still be done by humans. There will still be an exchange of services, even if all physical goods are virtually free, so there will still be an economy, although I agree it will be quite different.

And, you've neglected one very real and tangible good that can't be replicated - real estate. Only so many people can own an acre of beachfront in Hawaii. And, as always, pretty young girls will gravitate towards the men who own that land.

It's an interesting concept that you put forth, and could form the basis of an amusing novel, but as something that will become real? Fat chance.

You say "post-scarcity", I tend to say "middle school". But you're surely right that the sex factor would be less sublimated than it was in middle school, so there's that difference. Also, there would be guns.

So yeah. Middle school, plus sex and guns. Yeah, that's a world I _really_ want to live in. Like I want another hole in my head.

Space is still finite, as are the types of things that can be placed in said space. Just in regards to your work-out scenario, how many people can fit into a gym at once? How many lockers for stuff (although that might not matter)?

So, I think that there will be rather a trifecta economy of sorts in play in a post-scarcity world: power, people, places. And as Jan in Alberta stated, it starts with people gathering power to themselves. Then the people must be controlled to control the spaces, which is likely to result in culls and the like, as others speculate.

But it's an interesting premise, and absent the above considerations, would probably break down as you postulate.

Here's where we nip this whole thing in the bud and go right back to a standard, Brave New World dystopia. The smart people will NOT be uglier, simply because a post-scarcity world will also have a means to effortlessly provide gene therapy/plastic surgery to keep everyone looking at their best.

New inventions cannot be duplicated because they don't exist yet. For example, *assume* that 3-D replicators existed in the age of tube televisions and brick cell phones. People would still want the future -- flat screen HD TV and Android/iPhone cell phones. So right there is something left out of your hypothesis.

Furthermore, people still want to be healthy and long lived. Medical technology development, new drugs, and medical services would still be in high demand.

Cappy said: "Post Scarcity" is basically a utopian ideal of economists. It means everything is free because things are no longer scarce. Matter of fact the entire study of economics would be unnecessary in a world where resources were unlimitedly plentiful and not scarce."

Sorry Cap, your basic premise is flawed.

A "post-scarcity" economy is one in which all of the requirements for a human's basic physical needs are met by that humans capability to manufacturer them for his/her self.

This immediately leads to widespread hyperventilation about the "end of money" and forays into the whys and wherefores of how "it can't possibly work because ..."

Your taken-to-the-extreme example of humans transacting in interpersonal exchange is one of the basic assumptions inherent to the post-scarcity meme, though usually in the form of intellectual entertainment/information instead of sexual (though that seems as likely as the other to be honest). I'm hardly an Economic Lieutenant, but some of my early thinking on this can be read here.

I think you can extrapolate this with the value of time vs the cost of time graph. A person works a certain amount of time in order to meet their needs, and then spends the remaining time doing other activities. People balance their work time and time off so that the value of an additional hour off equals the cost of not working that additional hour.

As the time required to meet their needs reduces due to inexpensive goods, the time available to do other things increases, and as it increases each additional hour off is worth less and less.

So what do people with lots of time to spend do now? That is what the future looks like for everybody. Won't be too odd.

Where it gets wierd is when SERVICES are incredibly cheap due to automation. When they can create a robot that can replace the delight provided by the admiring eyes of a woman, THEN the world is going to get seriously odd.

interesting. i have had thoughts on the topic of a post scarcity economy but not in the terms you are thinking. a post scarcity economy is impossible, but in terms of calculus it is a limit. a point that is constantly being approached but that approach decelerates as it approaches so that it never reaches it but never stops getting closer.

i thought about it in terms of human conflict. i am of the opinion that human conflict arises from competition for resources as a consequence of scarcity. in the future, say, humans mine space for things, autonamous machines perform the banal functions and human profession is in fields that machines cant do or in monitoring many many of these machines. this will 1) exponentially raise the resources at their disposal, thus raising their enjoyment of life and 2) because space, in this hypothetical future, has vast resources but very few beings that need them, the resources will be available without need for conflict because they must not be taken from anybody.

now comes WHY absence of scarcity is impossible. even in a world where we dont need humans to obtain resources and you mustnt take resources from others to obtain them, there is still always a bottleneck ie distance to the resources, how easily are they attainable by current and projected means and abilities, how much of that resource is currently known to exist in a realistically attainable range... you get the idea.

so as we approach the limit of non scarcity, assuming we last that long, we will see that conflict becomes less economically viable as a means for attaining resources and, the best part, as non-scarcity is impossible, there will ALWAYS be endeavors that humans must engage in besides hedonistic self service, and furthermore these endeavors will get more specialized, complicated and therefore rewarding and as a result quality of life will go up.

i am talking about a hypothetical distant future of course, but it seems like a sound premise to me.

Some folk (namely Neal Stephenson) think that the speciation has already begun, in attitudes anyway.

Contemporary culture is a two-tiered system, like the Morlocks and the Eloi in H.G. Wells's The Time Machine, except that it's been turned upside down. In The Time Machine the Eloi were an effete upper class, supported by lots of subterranean Morlocks who kept the technological wheels turning. But in our world it's the other way round. The Morlocks are in the minority, and they are running the show, because they understand how everything works. The much more numerous Eloi learn everything they know from being steeped from birth in electronic media directed and controlled by book-reading Morlocks. So many ignorant people could be dangerous if they got pointed in the wrong direction, and so we've evolved a popular culture that is (a) almost unbelievably infectious and (b) neuters every person who gets infected by it, by rendering them unwilling to make judgments and incapable of taking stands.

Morlocks, who have the energy and intelligence to comprehend details, go out and master complex subjects and produce Disney-like Sensorial Interfaces so that Eloi can get the gist without having to strain their minds or endure boredom. Those Morlocks will go to India and tediously explore a hundred ruins, then come home and built sanitary bug-free versions: highlight films, as it were. This costs a lot, because Morlocks insist on good coffee and first-class airline tickets, but that's no problem because Eloi like to be dazzled and will gladly pay for it all.

No. A post-scarcity economy is most desirable. Why? Because it implies the technological capability such that small self-interested groups (or even single individuals) are capable of accomplishment feats (curing human aging for biological immortality, space colonization) that only governments or large corporations are capable of today.

I call this self-empowerment, which forms the basis of my personal belief system. Libertarianism, transhumanism, and free-market capitalism are world-views based on the concept of self-empowerment. That's why I am partial to these world-views. I do not believe in any world-view (e.g. philosophy, religion, etc.) that is not explicitly based on self-empowerment and individual self-ownership. Such world-views could never be of any use to me and are, by definition, worthless.

The only tradeable goods would be sex and attention? What about art? Music? Literature? Dance? Theatre? Technologies furthering the advance of these fields? I don't know what most other advocates of post scarcity ideas mean when they say post scarcity. But to me that means the ability to fufill basic needs without cutting into the profits of those providing them, or requiring them to expend any mental or physical effort to do so. Things like food and housing would definitely fall into that category, at least here in America, considering how much food is wasted and how vacant houses dwarf the amount of homeless people. I'm not sure if basic hygiene and water fall into that category, but I wouldn't be surprised if they did.

There will likely still be jobs worth doing, even if they are only creative work for self-actualisation and for a reason to contribute in that kind of way you need only look at our own schooldays. People will do anything, I mean anything, to get a gold star!

I think you oversimplify. The renderings of post-scarcity economies I am familiar with acknowledge that there will still be scarcity of a sort: it's simply the necessities of life that will cease to be meaningfully scarce. Even if we manage to create a replicator, there will still be the edges of scientific knowledge to fill out and new technologies to develop. The difference is that people will pursue these things for social capital and personal fulfillment rather than simply for base survival. If I want something that has never been made before, I'll still have to invent and create it myself. If I want to colonize another planet, I'll still have to go out and settle it myself. I see this sort of dynamic play out all the time in the open source world. Many people do, as it turns out, value more than just sex. And there's more to increasing sex appeal than building muscle and staying well-groomed. One could in fact argue that as the supply of attractive, virile humans rises, the value of differentiating traits such as unusually high intelligence would rise in relation.

This to a large extent was covered in a sci fi book called 'Voyage from Yesteryear'. In point of fact we only live in a scarcity economy due to artificial controls. The only thing keeping anything scarce at this point is... the expense of moving resources to where they need to be. Think of anything you want to consider; getting a man on the moon. Eliminating fossil fuels. What is the only rebuttal anyone ever has as to why we don't do it? "It costs too much". Since the money is no longer backed by an actual scarcity of anything (no gold standard etc) then it's a farcical construct. A scarcity model is being enforced on a post-scarcity world, to keep a select powerful few in those positions; this is partially because they feel as trapped by the system at the top as those at the other stratified levels as well.In Voyage, James P Hogan makes the hypothesis that money is nothing but a symbol for 'respect' (a statement one of the other commenters alludes to as well, regarding 'expertise'). Becoming respeccted directly, without currency would be how you would be 'paid' as you then have a direct marker. To that point also, Robert David Steele makes a similar point about open source intelligence and sharing of information globally. Once a person contributes, honestly and with some measure of acccuracy, with reliability, then they accrue a sort of social currency, a form of respect. These favors are how people have always worked in the absence of money. We would return to barter system, but not for goods. Just for services. We can make all the foods we need and machines we need. Scarcity is already a sham.

You could make everything without bound and without cost and you would not satisfy the human spirit. Left idle the human will find a way to compete. Even if you could create space without limit humans would compete over the abstract location. The human soul is competitive and understands only relative wealth. To deprive the human of the concept of relativity is dangerous. The human mind would invent an abstraction which could be scarce to compete over. Such is our nature. We would go mad. Our sanity is defined by scarcity and struggle against our environment.

I don't find the notion scary at all in fact I would welcome such a society,the people who define their self worth through how much money they make may go quite mad to begin with but I believe they would adapt in one way or another.

I for one dream of the day when I can pursue my many diverse hobbies without having to get up in the morning to go to work, there are certainly things I like doing because I find enjoyment in the doing of them regardless of how scarce or not things are, people after all still do things like gardening even though they can buy everything they need at the store.

Take time for example. You're going to the free theme park, but you're not alone since it's a sunny day and there is a line-up. You can wait 1 hour to get in, or you can PAY to pass in front of other people and save some time. Wait in line? That 1 hour will never be refunded to you. It's spent.

Another example is real estate, site, location. Sure everyone can now afford a super big house with a lawn, but what if your ideal is smelling saltwater and pines in the morning? Problem is, the whole coast has been built up, and to live in one of that houses by the seaside you need to displace someone. How can you do that? Pay for it. Buy the ideal spot.

Another example is uniqueness. You can download a million songs for free, but that guy across the street has paid for something you'll never have -- a private show in his living room by the members of U2.

Now you're taking a virtual/online art course at the university and you have the choice -- an AI teacher that'll do a pretty good job at teaching you techniques and creative approaches. Or a real/human teacher in real-time who'll interact you and challenge you in ways an AI won't be able to.

Another example? Bandwidth. Let's say people use very powerful mainframe computers to explore virtual worlds for various reasons -- leisure, creativity, psychology, socializing, etc. These virtual worlds are ranked by qualities such as "lag", "physics model" and "pixel resolution". And of course the higher the qualities, the higher the required bandwidth and energy consumption. As soon an any experience, be it physical or virtual, can have different degrees or qualities to it, then it is possible to assign it a value and hence, a price.

We could find at least a dozen other examples of "commodities" or "services" that would have a value in a post-scarcity world.

"Matter of fact the entire study of economics would be unnecessary in a world where resources were unlimitedly plentiful and not scarce." Correction:the study of MONETARY economics would be unnecessary. You still need to manage resources intelligently, which is what to "economize" actually means.

"Matter of fact the entire study of economics would be unnecessary in a world where resources were unlimitedly plentiful and not scarce." Correction:the study of MONETARY economics would be unnecessary. You still need to manage resources intelligently, which is what to "economize" actually means.

I disagree with this. A post-scarcity economy is most certainly possible. Does someone have to move around resources, refine raw materials, etc.? Yes. Do they have to be sentient? No. Robots can do that easily.